T-Mobile is "choking" its customers unlimited data connections, ditching unlimited allowances for a new pricing scheme. Its prices beat AT&T, but come up short versus Sprint, who will soon be the only carrier with unlimited data. (Source: FHM)

T-Mobile family plan is $30/month more than Sprint, single line is $20/month more, and lacks unlimited data

With an
acquisition by AT&T, Inc (T) seemingly impending, many customers
of Deutsche Telekom AG's (DTE) T-Mobile
USA phone carrier are already jumping ship. T-Mobile USA yesterday
announced new pricing that may give some a bit of extra incentive to stay,
while giving others all the more reason to jump ship.

Verizon Communications, Inc.'s (VZ),
the nation's largest carrier (before the T-Mobile merger closes, at least) with
104+ million subscribers will also phase out its unlimited data plan this
summer, and has already started capping data usage on its 4G LTE
network. Like T-Mobile, Verizon will pad this blow with new family
options.

T-Mobile's new tiered data plan offers 200 MB for $15 USD/month or 2 GB for $20
USD/month.
T-Mobile's tier extends higher, though with a 5 GB per month allowance
for $30 USD/month, or a 10 GB allowance for $60 USD/month.

Rather than imposing overage charges, T-Mobile is merely bumping the offender's
connection down to 2G and letting them languish at slow data speeds until the
billing quarter is over or they pay to upgrade their data plan.

To be fair, T-Mobile's "unlimited" data might not have been so
unlimited after all. The carrier was caught last August throttling its unlimited plan connections and
sued in California court. After the news broke, T-Mobile confessed that
it indeed intended to throttle "unlimited" connections if they were
used past 5 GB.

II. Family Plans

To soften the blow of killing unlimited data; T-Mobile is unveiling some pretty
competitive family deals.

Individual plans currently have tiered pricing for voice allowances of 500,
1,000, or unlimited minutes. The new family plans will have voice
allowances of 1,000, 2,000, or unlimited minutes.

Similarly, the individual plan offers unlimited texts for $10 USD/month; the
family plan will offer unlimited texting for $20 USD/month. Similarly,
the data plans cost twice as much when shared on a family plan.

A family plan starts with 2 lines, but costs $10 USD/month to add more lines.
Up to 5 lines can be on a single family plan.

The results are a fairly competitive pricing scheme that narrowly beats
AT&T in pricing (for example, family plan texting costs $30 USD/month on
AT&T). It still remains to be seen how the plan stacks up against
Verizon's updated rates, which it plans to unveil this summer.

III. 4G Where Art Thou?

We've said it before and we'll say it again, no matter how much T-Mobile wishes
it, its "4G" isn't true 4G. Rather its a 3.5G tech (HSPA+)
rebranded by clever marketers.

T-Mobile's HSPA+ network fails to deliver the full speeds promised by the HSPA+
specification, much as current true 4G wireless networks
from Verizon and Sprint Nextel Corp. (S)
do. But as the base HSPA+ spec is significantly lower than the 4G spec,
real world imperfect HSPA+ generally is slower than real world imperfect 4G
(LTE, WiMAX).

T-Mobile's pricing certainly makes it more attractive than AT&T, who is
also putting off the upgrade to true 4G, opting to rebrand its own HSPA+ as 4G
as well. But the plan may seem less attractive when Verizon unveils its
own pricing on true 4G data.

IV. Sprint -- The Last Hope

All the market movement leaves Sprint as the last hope for unlimited smartphone
data.

Sprint is arguably the best deal on the market, offering unlimited talk,
text, and data (+4G) for $99.99 USD/month.

In many regions you'll pay at least $35 USD in local taxes and fees, so your
real world phone bill with Sprint will end up at around $135 USD/month for a
connection with 4G. By contrast a non-4G, 10 GB capped
connection, with fees will be around $155 USD/month on T-Mobile ($120 USD/month
pre-fees).

T-Mobile's family plans also look even more miserable in the face of Sprint's.
At 2-line unlimited talk, text, and 10 GB data family plan without 4G
will cost you $220 USD/month pre-fees on T-Mobile. That same plan will
cost you $190 USD/month, pre-fees on Sprint.

So Sprint’s plans give you unlimited data, true 4G access in some reasons, and
cost $20 USD less for individual plans and $30 USD less for family plans.

All of this sounds somewhat like an ad or promotion, but it's just the plan
facts -- Sprint is far and away the most affordable carrier and the only
carrier to still be fighting the good fight with unlimited data.

Now there are a couple caveats -- in some regions Sprint's network isn't quite
as strong as Verizon and AT&T (the same could be said of T-Mobile).
Note that in some areas the reverse is true, but nationwide AT&T and
Verizon tend to be strongest in coverage. Also Sprint's executive
leadership has suggested that they may
impose data caps at some point, though for now they're content to
leave their connection uncapped.

Sprint current has only 51 million customers, far less than the 129.8 million
that T-Mobile + AT&T have and 104 million on Verizon. But it would
seem likely that some customers at least who had stuck with T-Mobile for the
free data may jump ship to Sprint.

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I switched to Straight Talk about a year ago - never going back to any of the big-name carriers.

ST sells their stuff exclusively from their website or Walmart. It's actually a division of Tracfone. They run on either Verizon or AT&T's network, depending on the phone you buy. No contracts. $30 a month for 1,000 minutes and 1,000 texts and a paltry amount of data. $45 a month for unlimited everything.

I bought a Nokia E71 for $200 (they don't subsidize phones as much...which is fine. No contract = no ETF) and it has free turn-by-turn navigation too. Does everything I could possibly want a phone to do. And it can either tether by wire to my laptop for internet, or for $10 you can buy a software app that turns it into a wi-fi hotspot.

There are some downsides to ST. First, no roaming - either you're on your preferred network, or you have no service. No foreign service - so no service if you go on vacation to the Bahamas. The phone selection is somewhat limited, but realistically they've got a phone for everybody so long as you're not one of those "ZOMG I needz teh Ifone with the bigger geebees!" kind of people.

Granted those potential downsides, which don't bother me in the least - and really I think are fine for the vast majority of potential consumers, I can't even begin to justify going back to Verizon/Sprint/AT&T/T-Mobile/Whatever. There's just no way you could make sense of that.

You are preaching to the wrong crowd. Majority of the people will never go your route either because they need the coverage, uptime, and the latest smartphone, or they just think they do. I've never had a contract, I've had T-Mobile prepaid to-go (still do), I've had Page Plus prepaid to-go, and now I'm mostly using Virgin Mobile prepaid $25 plan. It has a few downsides but none of that matters to me since none of the major carriers cater to low usage guy like me. I'm not going to willingly fork over $1000 a year for using 100-150 minutes, 100-150 text messages and 50-100Mb every month, AND have no option of leaving without paying exuberant ETF's on top of that $1K. Virgin Mobile has its issues, but saving $1200+ over the length of a typical two year contract makes it more than acceptable to me.